BIGTECHCOMPANY

Financial Overview
BigTechCompany

QUARTERLY PERFORMANCE
2

BigTechCompany Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
($ in thousands) 2021 2021 2021 2021 2022 2022 2022 2022 2023
Revenues $5,01,430 $5,13,924 $5,23,843 $5,39,652 $5,50,744 $5,57,910 $5,54,791 $5,49,644 $5,71,305
Quarterly Growth 2% 2% 3% 2% 1% -1% -1% 4%

Operating Income (EBITDA) $1,37,190 $1,29,334 $1,22,868 $44,224 $1,38,014 $1,10,480 $1,07,311 $38,493 $1,20,002
Quarterly Growth -6% -5% -64% 212% -20% -3% -64% 212%

Net Income $1,19,470 $94,711 $1,01,435 $42,520 $1,11,821 $1,00,867 $97,877 $3,870 $1,02,019
Quarterly Growth -21% 7% -58% 163% -10% -3% -96% 2536%
Net Income per Share $3.85 $3.05 $3.27 $1.37 $3.60 $3.24 $3.14 $0.12 $3.27

Free Cash Flow (FCF) $48,416 -$12,253 -$7,438 -$39,848 $56,118 $891 $33,030 $23,259 $56,812

Financial Metrics Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023
EBITDA Margin 27% 25% 23% 8% 25% 20% 19% 7% 21%
Net Income Margin 24% 18% 19% 8% 20% 18% 18% 1% 18%
FCF per Diluted Share $1.52 -$0.38 -$0.23 -$1.25 $1.77 $0.03 $1.05 $0.74 $1.79
BigTechCompany

CUSTOMER TRENDS
3

Key Takeaways:
▪ BigTechCompany increased its subscription cost in Q1 2022
▪ This led to a spike in the number of customers canceling their services; however, the number of new users also increased during this time.
▪ While the company experienced an atypically high churn rate in Q2 2022, this has now decreased to the levels seen before the price increase.

Customer Trends Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
#s in thousands 2021 2021 2021 2021 2022 2022 2022 2022 2023

Cost of Subscription (Quarterly) $33 $33 $33 $33 $34 $34 $34 $34 $34

Number of Users (Beginning of Period) 15,195 15,573 15,874 16,353 16,198 16,409 16,317 16,166 16,803
Customer Attrition 89 200 204 444 2,446 5,000 1,655 1,244 322
New Users 468 501 683 289 2,657 4,908 1,504 1,881 1,965
Number of Users (End of Period) 15,573 15,874 16,353 16,198 16,409 16,317 16,166 16,803 18,446
Change in # of Users 2% 3% -1% 1% -1% -1% 4% 10%

Net Change in Customers 379 301 479 (155) 211 (92) (151) 637 1,643
Churn Rate 0.6% 1.3% 1.3% 2.7% 15.1% 30.5% 10.1% 7.7% 1.9%
BigTechCompany

PROJECTIONS
4

FY FY FY FY FY 2020-2024E
Financial Highlights 2020 2021 2022 2023E 2024E CAGR
Revenues $19,99,444 $20,78,849 $22,13,089 $22,85,221 $26,28,004 7%
Annual Growth 4% 6% 3% 15%
Operating Income (EBITDA) $3,71,461 $4,33,616 $3,94,298 $4,80,009 $5,28,010 9%
Annual Growth 17% -9% 22% 10%
Net Income $2,47,641 $3,58,136 $3,14,435 $4,08,075 $4,40,721 16%
Annual Growth 45% -12% 30% 8%
Net Income per Share $12.11 $11.55 $10.11 $13.09 $14.14 4%
Free Cash Flow (FCF) $755 -$11,123 $1,13,297 $2,27,248 $2,22,703 314%

Financial Metrics
EBITDA Margin 19% 21% 18% 21% 20%
Net Income Margin 12% 17% 14% 18% 17%
Debt / EBITDA 2.7x 2.4x 2.5x 2.1x 1.9x
FCF per Diluted Share $0.03 -$0.35 $3.58 $7.18 $7.03
BigTechCompany

CONCLUSIONS
5

Company Highlights
▪ BigTechCompany has seen steady revenue growth over the past two years and is expected to continue growing in the future.
▪ The company is cash flow positive and will continue to be in the future.
▪ The company’s debt/EBITDA is currently 2.4x and is expected to continue to decrease. This is low compared to the industry average of 4.0x,
suggesting the company has a healthy leverage ratio.
Areas of Concern
▪ The company has volatile quarterly expenses, particularly in the 4th quarter of each year.
▪ The company’s EBITDA margin is low compared to the industry average of 39%.
Recommendation
▪ We should develop a relationship with BigTechCompany, as they are continuing to grow and could be a valuable client in the future.
▪ We should ask the company to clarify why expenses are higher in some quarters vs. others.
▪ We should ask about the company’s plans to increase prices in the future, as this may lead to customer attrition.